You may have a great idea for a new product or service but you need to know how to develop and market it commercially. You could try to sell your idea or invention to a manufacturer who would market it and pay you royalties, but finding such a company could be an overwhelming task. You also could consider using the services of an invention promotion firm.
Some invention promotion firms may help you get your idea or invention into the marketplace, but beware, some inventors have paid thousands of dollars to firms that promised to evaluate, develop, patent, and market inventions and got nothing for their money. Often, it is difficult to distinguish between a fraudulent invention promotion firm and a legitimate one. Unscrupulous and honest firms often use many similar advertising and sales techniques, market evaluations, and contract strategies. However, there are some comparisons that may help you identify legitimate companies.
Some invention promotion firms target independent inventors, frequently offering free information to help them patent and market inventions. They also may advertise a toll-free "800" telephone number that inventors can call for written information. However, the information may consist only of brochures about the promoter.
Invention promotion firms may offer to do a free preliminary review of your invention. Firms may claim to know or have special access to manufacturers or to have been retained by manufacturers who are looking for new product ideas. These kinds of claims often can be false or exaggerated. Before signing a contract, ask for some proof of their claims.
After a preliminary review, a firm might tell you it needs to do a market evaluation on your idea, which may cost several hundred dollars. Questionable firms often make vague and general statements and provide no hard evidence that there is a consumer market for your invention. Reputable company reports, on the other hand, deal with specifics. Before you pay for a report on your idea, ask what specific information you will receive.
Some invention promotion firms also may offer you a contract where they agree to act as your exclusive marketing and licensing agent. A questionable firm may require you to pay an upfront fee of as much as $10,000 and to commit a percentage of the royalties the invention may earn. Reputable licensing agents typically do not rely principally on large upfront fees, but rely on royalties from the successful licensing of client inventions. Reputable companies are very selective about which ideas and inventions they pursue. A request for an upfront fee is another distinguishing characteristic of a questionable invention promotion company.
If you are interested in working with an invention promotion firm, consider taking the following precautions before you sign a contract and pay significant amounts of money:
Be wary of a firm that is insists on a substantial upfront fee.
Be careful of an invention promotion firm that offers to review or evaluate your invention but refuses to disclose details concerning its criteria, system of review, and qualifications of company evaluators. Without this information, you cannot make meaningful comparisons with other firms.
Require the firm to check on existing invention patents. Unscrupulous firms are willing to promote virtually any idea or invention with no regard to its patent ability.
Be wary of an invention promotion firm that will not disclose its success and rejection rates. Success rates show the number of clients who made money. An invention promotion firm that does not reject most of the inventions it reviews may be unduly optimistic, if not dishonest, in its evaluations.
Be wary of a firm that claims to have special access to manufacturers looking for new products, but refuses to document such claims.
Be skeptical of claims and assurances that your invention will make money. No one can guarantee your invention's success.
Beware of high-pressure sales tactics.
Investigate the company before making any commitments. Call your BBB in your area and the area in which the company is located to learn if they know of any unresolved consumer complaints about the firm.
Make sure your contract contains all agreed upon terms, written and verbal, before you sign. If possible, have the agreement reviewed by an attorney.
If you do not get satisfactory answers to all of your questions with an invention promotion firm, consider whether you want to sign a contract. Once a dishonest company has your money, it is unlikely you will ever get it back.
- Ask what the total cost of services will be. Consider it a warning if the salesperson hesitates to answer.
For more information, you may wish to call The Canadian Intellectual Properties Office with the Federal Government at 1-819-997-1936 for more information on patents and trademarks. You may also check with the Federal Trade Commission website at www.ftc.gov and Inventnet: the Inventers Network website at www.inventnet.com.
(revised by the BBB, September 13, 2001)
Adapted from Inventnet: The Inventors Net